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Strategy-Proof House Allocation with Price Restrictions

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Abstract
This paper considers a house allocation problem with no initial ownership and where prices are bounded from below and above by exogenously given price restrictions. This type of housing market contains, e.g., the "assignment market" and the "student placement problem" as special cases. A mechanism called the minimal RPE mechanism is defined, and two main results are obtained. First, it is demonstrated that the mechanism is manipulable at some profile in the full preference domain. Second, it is proved that there is a subset of the full domain, containing almost all profiles in the full domain, such that the minimal RPE mechanism is strategy-proof in that subset.

Suggested Citation

  • Andersson, Tommy & Svensson, Lars-Gunnar, 2015. "Strategy-Proof House Allocation with Price Restrictions," Working Papers 2015:9, Lund University, Department of Economics, revised 15 Oct 2015.
    • Handle: RePEc:hhs:lunewp:2015_009
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    References listed on IDEAS

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    1. Andersson, Tommy & Yang, Zaifu & Zhang, Dongmo, 2015. "How to efficiently allocate houses under price controls?," Economics Letters, Elsevier, vol. 130(C), pages 97-99.
    2. Szilvia Papai, 2000. "Strategyproof Assignment by Hierarchical Exchange," Econometrica, Econometric Society, vol. 68(6), pages 1403-1434, November.
    3. Lars-Gunnar Svensson & Bo Larsson, 2005. "Strategy-proofness, core, and sequential trade," Review of Economic Design, Springer;Society for Economic Design, vol. 9(2), pages 167-190, April.
    4. Talman, Dolf & Yang, Zaifu, 2008. "A dynamic auction for differentiated items under price rigidities," Economics Letters, Elsevier, vol. 99(2), pages 278-281, May.
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    6. Herings, P. Jean-Jacques, 2018. "Equilibrium and matching under price controls," Journal of Economic Theory, Elsevier, vol. 177(C), pages 222-244.
    7. Lars-Gunnar Svensson, 1999. "Strategy-proof allocation of indivisible goods," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 16(4), pages 557-567.
    8. Masso, Jordi & Neme, Alejandro, 2007. "Bribe-proof rules in the division problem," Games and Economic Behavior, Elsevier, vol. 61(2), pages 331-343, November.
    9. Schummer, James, 2000. "Manipulation through Bribes," Journal of Economic Theory, Elsevier, vol. 91(2), pages 180-198, April.
    10. Tommy Andersson & Lars‐Gunnar Svensson, 2014. "Non‐Manipulable House Allocation With Rent Control," Econometrica, Econometric Society, vol. 82(2), pages 507-539, March.
    11. Schummer, James, 2000. "Eliciting Preferences to Assign Positions and Compensation," Games and Economic Behavior, Elsevier, vol. 30(2), pages 293-318, February.
    12. Balinski, Michel & Sonmez, Tayfun, 1999. "A Tale of Two Mechanisms: Student Placement," Journal of Economic Theory, Elsevier, vol. 84(1), pages 73-94, January.
    13. Hylland, Aanund & Zeckhauser, Richard, 1979. "The Efficient Allocation of Individuals to Positions," Journal of Political Economy, University of Chicago Press, vol. 87(2), pages 293-314, April.
    14. Talman, A.J.J. & Yang, Z.F., 2008. "A dynamic auction for differentiated items under price rigidity," Other publications TiSEM dbce61c1-07fd-4e95-a9c1-4, Tilburg University, School of Economics and Management.
    15. Leonard, Herman B, 1983. "Elicitation of Honest Preferences for the Assignment of Individuals to Positions," Journal of Political Economy, University of Chicago Press, vol. 91(3), pages 461-479, June.
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    Citations

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    Cited by:

    1. Gerard van der Laan & Zaifu Yang, 2016. "An ascending multi-item auction with financially constrained bidders," The Journal of Mechanism and Institution Design, Society for the Promotion of Mechanism and Institution Design, University of York, vol. 1(1), pages 109-149, December.
    2. Zhan Wang & Jinpeng Ma & Hongwei Zhang, 2023. "Object-based unawareness: Theory and applications," The Journal of Mechanism and Institution Design, Society for the Promotion of Mechanism and Institution Design, University of York, vol. 8(1), pages 1-55, December.
    3. Andersson, Tommy & Svensson, Lars-Gunnar, 2018. "Sequential rules for house allocation with price restrictions," Games and Economic Behavior, Elsevier, vol. 107(C), pages 41-59.
    4. Yi, Jianxin & Wang, Hefei & Li, Yong, 2018. "Designing efficient and incentive compatible mechanisms is almost impossible in quasi-linear environments," Economics Letters, Elsevier, vol. 173(C), pages 113-117.
    5. Zhou, Yu & Serizawa, Shigehiro, 2018. "Strategy-proofness and efficiency for non-quasi-linear and common-tiered-object preferences: Characterization of minimum price rule," Games and Economic Behavior, Elsevier, vol. 109(C), pages 327-363.

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    More about this item

    Keywords

    house allocation; matching; strategy-proofness; preference domains;
    All these keywords.

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations

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